Auto Executives See VW, Hyundai Gaining Share in the U.S.

Volkswagen AG and Hyundai Motor Co. are the most likely to gain U.S. market share during the next five years, a survey found.

Sixty-three percent of automotive-industry executives who took part in Booz & Co.’s annual confidence survey said Hyundai and Kia are likely to increase share while 60 percent believe Volkswagen and Audi will gain. The third-highest response was for Ford Motor Co. with 43 percent predicting more growth than in the total industry.

The latest findings from the annual U.S. Automotive Industry Survey and Confidence Index conducted online in July and August by Booz follow results released in September that found that 96 percent of automaker executives perceive the industry as “much better” or “somewhat better” than a year ago. Among auto-supplier executives, 88 percent said the industry is better than a year earlier.

At the same time, those surveyed are beginning to fret that automakers will offer profit-sapping discounts to keep sales rolling. Respondents said they expect a slowing of U.S. sales growth from 2014 through 2017 as the compounded annual rate drops to 1.4 percent from more than 10 percent from 2010 to 2013, according to Booz, which partnered with Bloomberg News for the survey.

In that environment, “the only way to grow is to take share,” Scott Corwin, a vice president at Booz, said in a telephone interview. “You do see an environment where if you stacked up all of their forecasts in terms of what they want to sell, it would exceed the natural market demand.”

U.S. auto sales are on pace for the best year since 2007 as an onslaught of new models fills showrooms and lower operating costs help boost automakers’ bottom lines.

Winners, Losers

After VW and Hyundai, 43 percent of executives surveyed said Ford, including its Lincoln brand, was likely to gain share followed by 41 percent saying Bayerische Motoren Werke AG’s BMW and Mini brands would gain share.

Subaru, the Fuji Heavy Industries Ltd. brand, was most often seen as likely to lose share, selected by 39 percent of executives surveyed, followed by Nissan Motor Co., including its Infiniti brand, which was cited by 32 percent.

The optimism about Hyundai and Volkswagen isn’t as high as a year ago. The Booz confidence index in 2012 found that 88 percent of industry executives said Hyundai and Kia were likely to gain market share during the next five years, while 72 percent said Volkswagen and Audi.

The shift coincides with a loss of share this year. U.S. deliveries of VW, including Audi, rose 1.4 percent this year through September after VW sales rose 31 percent in all of 2012. VW’s namesake brand sales slipped 2.6 percent through the first nine months of this year, according to researcher Autodata Corp.

While Kia Motors Corp. deliveries fell 4.3 percent this year through September, Hyundai sales rose 1.6 percent during that period. Hyundai brand sales in the U.S. jumped 8.9 percent in all of 2012.

To contact the reporter on this story: Tim Higgins in Southfield, Michigan at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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